NetList Inc (NLST)

[umiak]

It is very important that an investor understand the role that government plays in the patent, creator/infringer world and have a clear understanding of what happened starting in the Obama administration. What this understanding can do is provide a level of confidence in Netlist's case. That is Netlist's patents prevailed and case returned to district court where proper discovery/jury(!) can be performed/utilized. Here is a sort of outline starting with the Obama administration passing the AIA and ending with some consequences:

AIA- The Patent Trial and Appeal Board (PTAB) is a tribunal within the United States Patent and Trademark Office (USPTO) that reviews rejections made by examiners in proceedings called ex parte appeals and decides patentability questions for issued patents raised by third parties in proceedings called AIA trials.

The America Invents Act (AIA) created the PTAB or the Board. It was known previously as the Board of Patent Appeals and Interferences or BPAI. https://www.uspto.gov/patents/ptab/ptab-inventors

PTAB- The AIA trial proceedings were intended to be an alternative to district court litigation with several key differences from district court proceedings. For instance, AIA trials are conducted before a panel of three technically-trained administrative patent judges whereas district court litigation may be in front of a jury. Also, while discovery is available in both forums, discovery before the PTAB is more limited in scope, thereby costing the parties less to litigate. Finally, PTAB trials conclude normally within 12 months from institution; district court litigation, in contrast, may take several years to conclude. https://www.uspto.gov/learning-and-resources/newsletter/inventors-eye/patent-trial-and-appeal-board-who-are-they-and-what

PTAB (consequences)- In patent litigation, it is now essentially the norm for accused infringers to file a parallel IPR petition challenging patent validity and seek a stay of the district court litigation. In fact, IPR petitions have risen so dramatically over the last few years that the number of PTAB appeals before the federal circuit has recently eclipsed the number of district court patent appeals.

Given the pervasive use of AIA Petitions and the rate at which patents are being invalidated by the PTAB, it is not surprising that considerable disagreement exists on whether these new PTAB proceedings have improved or harmed the patent system overall. Many technology companies view IPRs and CBM reviews as a very effective way to challenge suspect patents and combat frivolous infringement litigation. However, numerous patent owners in the life science industries see the high invalidity rate of PTAB proceedings as an alarming trend that has decimated the ability to enforce U.S. patents and weakened America’s innovation system.

https://morningconsult.com/opinions/four-reasons-trumps-pick-next-uspto-director-matters/

JMO- The AIA approached solving the problem from the wrong end. Instead of making the USPTO more top heavy they should have raised the bar at the examiner level.
Now the PTAB has just become, in part, another stall tactic for big business.